Growth set to accelerate above 2% in 2015 and 2016
The Dutch economy grew at a fairly brisk pace over the past two quarters and the outlook is good. As a result, we have raised our growth estimate for this year. Both this and next year, growth is set to be above 2%.
For several quarters now, economic growth in the Netherlands has been broadly driven by exports, investment and household consumption. This will remain the case.
The Dutch and eurozone economies are benefiting from the weaker euro and the low oil price. These factors are feeding through into the economy with a time lag. The ECB’s extensive bond-buying programme is also easing financial conditions. In addition, we see that the banks in the eurozone and the Netherlands are gradually starting to relax their lending conditions a little.
But the economy has not yet returned to its level before the Great Recession
The economy has been showing growth for some time now. But the ‘growth loss’ we sustained in the two recent recessions has not yet been made up.
In the first quarter of this year, GDP was still 1% lower than at the start of 2008. With a normal growth rate, GDP would have been about 13% higher by now.
Over the past seven years exports have grown, but private investment and private consumption have declined. Residential investment saw particularly severe contraction. Despite the recent recovery, the level is still some 30% lower than at the start of 2008.
More jobs are gradually being created. That said, the number of people entering (or re-entering) the labour market is also on the rise so that the rate of unemployment is only falling slowly.